Inflation for September comes in cooler than expected

Prices for consumer goods rose 0.3% in September, or lower than expected, according to a long-delayed economic report issued despite the government shutdown.

The inflation reading was slightly below Wall Street estimates of 0.4%, and prices were up 3% on a yearly basis, the Bureau of Labor Statistics said Friday.

BLS had suspended economic reports during the shutdown but issued the September inflation report because the Social Security Administration relies on it to benchmark cost-of-living adjustments in benefit checks.

The White House said there may not be an October inflation report, however, citing the shutdown and BLS’ inability to “deploy to the field.”

Economists, consumers and politicians are watching the inflation numbers closely after President Trump pledged to bring down soaring costs and issued sweeping tariffs on imports, which could raise some prices.

The cooler-than-expected report should dampen fears of tariff-fueled increase for now. U.S. stocks jumped after the report because it paves the way for the Federal Reserve to issue another rate cut later this month.

Some economists, however, said everyday consumers are not getting much relief on basic items. For instance, the index for meats, poultry, fish, and eggs rose 5.2% over the last 12 months.

“On Wall Street, many will cheer the lower-than-expected inflation reads. Now the Fed can cut rates and focus on the labor market,” Heather Long, the chief economist at the Navy Federal Credit Union, said on X. 

“But on Main Street, people see the first 3% CPI inflation read since January,” she wrote. “And the basics – food and gas prices rising – are driving that uptick (along with some tariff-impacted items such as furniture, tools, car parts and used cars).”

BLS said the gasoline index rose 4.1% in September, making it the biggest factor in the all-items monthly increase, though gas prices were down 0.5% over the 12-month span.

The White House crowed about the cooler-than-anticipated report.

“Inflation came in below market expectations in September, thanks to President Trump’s economic agenda,” White House press secretary Karoline Leavitt said in a release. “Democrats choosing to keep the government closed will likely result in no October inflation report, which will leave businesses, markets, families and the Federal Reserve in disarray.”

Kevin Hassett, the director of the National Economic Council, told White House reporters that September’s overall numbers “were fantastic” and the rise in the energy segment was due to a shutdown at an Indiana refinery, which spiked gas prices across the Midwest.